Reform Promises More of the Same for Saudi Arabia's Shiites

This is the second installment of a five-part series that explores the economic and social challenges facing the countries of the Gulf Cooperation Council, how their governments are responding and what effect their actions will have on the region's sectarian dynamics.

Saudi Arabia has been the de facto leader of the Gulf Cooperation Council (GCC) for most of the GCC's existence, boasting the largest economy and population along with the highest oil production in the bloc. This year, it is leading the GCC's members — along with the rest of the OPEC cartel — through production cuts in hopes of boosting, or at least maintaining, international oil prices. But Riyadh understands that even a recovery in the price of oil will not be enough to secure the Saudi economy's future. To that end, Saudi Arabia has taken steps to reduce its spending and increase domestic revenue from sources beyond oil production. Its long-term plans to revitalize its economy are even more ambitious, encompassing privatization campaigns and labor and social reforms, including a campaign to increase women's participation in the workforce.

Yet by introducing such wide-ranging measures, however necessary, the ruling House of Saud will also be putting itself in tenuous position. The reform process will affect many different interest groups across the country and risks pitting them against one another. In particular, the sweeping changes will further strain relations between the kingdom's Sunni and Shiite communities. And despite Riyadh's efforts to balance these competing interests, the Shiites will likely remain relegated to the fringes of Saudi society.

The House of Saud has been sensitive to domestic unrest, protests and factional divisions since it took power in the country. But the 1979 Iranian Revolution and the 2011 Arab Spring uprisings made Riyadh acutely aware of the threats to its continued rule. In the wake of the Iranian Revolution, the Saudi government grew wary of its Shiite subjects, whom Riyadh suspected of having untoward ties with Iran. The Arab Spring protests, during which citizens — especially young people — in the Middle East and North Africa came together across factional divides against their longtime leaders, shook the House of Saud even more deeply. When protests erupted in the country's Eastern Province, home to much of its Shiite minority, Riyadh took a two-pronged approach to keep the demonstrations from blossoming into the kind of movement that had felled governments in Egypt and Tunisia. The Saudi government ramped up its social spending, offering $93 billion in handouts to pacify its people. At the same time, it cracked down on dissent. The strategy is Riyadh's go-to in times of unrest and uncertainty, but it drove up its expenses. By 2014, the government could only hope to balance its budget if oil prices stayed at about $100 per barrel.

Time for a Change

Now, more than two years after crashing in mid-2014, oil prices are hovering around $55 per barrel and will likely stay there for a while, leaving Riyadh to the politically unpleasant task of cutting back its social spending. The Saudi government unveiled its Vision 2030 program and National Transformation Plan last spring, laying out dozens of goals to wean the country off oil revenues and curb its spending. Among the plans' most significant proposals are initiatives to increase investment in sectors outside the energy industry, triple non-oil revenues by 2020 through taxes and fees, boost Saudi employment in the private sector and cut public wage expenses. The Saudi government also intends to open the country's financial sector to more foreign investment and, more important, to put up 5 percent of its crown jewel, the state-owned Saudi Arabian Oil Co. (Saudi Aramco), for initial public offering. Some of these measures are meant to satisfy demands for reform from the Saudi public, particularly the country's youths. Since more than half the kingdom's population is under 25 years old, the number of working-age adults in Saudi Arabia is set to skyrocket over the next decade. Many Saudi youths — though certainly not all — also advocate reforms to liberalize the kingdom's strict social policies.

Still, reform will be a bitter pill to swallow for many Saudis. Inevitably, the initiatives Riyadh is pursuing will hurt some factions of society. To manage public dissent, the House of Saud will likely fall back on its time-honored tactic, playing different groups against one another to keep any one opposition movement from gaining too much traction. Saudi Shiites, who make up about 10 to 15 percent of the kingdom's population and have been among the most vocal groups calling for reform, will doubtless become entangled in the government's efforts to control unrest.

Opportunities Once Lost

At first glance, Riyadh's economic liberalization scheme could help the Shiite community, providing its members with more opportunities than they have had for the past few decades. Until the Iranian Revolution, many local Shiites found employment in the Eastern Province's bustling oil and manufacturing industries. But the Saudi government became suspicious of its Shiite population after the uprising, fearing that its members would take up the cause of Islamic revolution. Employment opportunities for Saudi Shiites began to vanish. (Saudi Aramco, for instance, had more leeway to introduce employment policies that favored Sunnis after its nationalization in the 1980s.) Though some Shiites have found success in the years since in midlevel management positions, few have reached the upper echelons of Saudi businesses or even foreign subsidiaries in the country.

But no matter how deep Riyadh's reform efforts go, they will not resolve the underlying sectarian divisions that sideline the country's Shiites. As they work to alter the kingdom's course, Saudi leaders will be loath to jeopardize their alliance with prominent clerics in the Salafist community, who will try to make sure that Shiites' religious rights and role in clerical society remain limited. Saudi Arabia recognizes that continued sectarian unrest and protests are probably inevitable. Other strands of political Islam in the country, however, including Sunni groups such as the "Sahwa" (Awakening) movement, pose a far greater threat to the country's continuity than do the Shiites, since their beliefs resonate with more of the Saudi public. So long as Riyadh can prevent the Shiite community from forming an alliance with a large Sunni group by alternately appeasing and cracking down on it, Saudi Shiites will not be an existential danger to their government.

A More Peaceful Dissent?

In spite of their economic plight, most Shiite leaders in Saudi Arabia have rejected violent protests and interventions over the past 20 years. Instead, they have taken a different approach, engaging the government in slow negotiations to gain piecemeal concessions and increased recognition. Even Hezbollah al-Hejaz, a militant group with ties to Iran that likely carried out a deadly attack on the Khobar Towers in 1996, has largely turned away from violence, discouraged by the Saudi security apparatus' crackdowns on Shiite extremism. The Arab Spring protests that broke out in Eastern Province revealed the extent to which Shiite groups had changed their modus operandi. Throughout the demonstrations, many senior Shiite clerics urged the protesters — young people who had grown disillusioned with the small gains that government negotiations yielded but lacked the experiences that had turned older Shiites away from protesting — to exercise restraint. From their point of view, a protest had served its function once the government ceded to even the most modest demands.

This attitude was not universal, though. Nimr al-Nimr, a senior Shiite cleric, encouraged the protests and galvanized thousands ofyoung people in Eastern Province to join the fray before his arrest in 2012. A Saudi court later sentenced him to death for his role in the demonstrations; his execution in 2016 was likely intended in part to demonstrate to a new generation of Saudi Shiites the lengths that Riyadh would go to contain unrest. Now, it is unclear who will take al-Nimr's place to rally young Shiites. Most of the well-established Shiite clerics left in Saudi Arabia seem content to continue their steady discussions with the government. Nevertheless, the Arab Spring demonstrations illustrated the power of new technologies to spark and fuel protest movements.

To stave off another wave of protests, Riyadh will likely try to cultivate ties with Shiite leaders willing to temper unrest in exchange for concessions, perhaps by including them, however nominally, in the existing clerical system. (Riyadh has proposed a similar idea to Bahrain.) In doing so, the Saudi government would again run up against resistance from its Salafist allies and Sunni leaders, at least in larger urban areas. Consequently, Riyadh will probably focus its efforts on Shiite-majority cities, where many Shiites already hold local clerical and political offices. The growing threat of Sunni militancy in Saudi Arabia — whether from Salafist extremists or jihadist groups such as the Islamic State — will also push Riyadh to work with Shiite leaders to try to keep sectarian tensions in check.

Enter Iran

As Saudi Arabia's government tries to reconcile the demands of its Shiite community with those of other groups — and with its ambitious reform campaign — Iran will no doubt try to gain influence with Saudi Shiites. Based on its past attempts, however, Tehran will probably not get far in this endeavor. Iran has had little success in making inroads with the Saudi Shiite community, beyond its sway with militant groups such as Hezbollah al-Hejaz and the Organization for the Islamic Revolution. Most Shiites in Saudi Arabia have kept their distance from Tehran and resent the perception that they are simply doing Iran's bidding. In fact, Saudi Shiites pride themselves on their Saudi and Arab heritage, considering themselves al asala al shiiya — or "authentically Shiite." By executing al-Nimr, who had studied in Iran and threatened to seek foreign support if Riyadh resisted his demands, the Saudi government also sent a message to Tehran that it would not tolerate meddling in Eastern Province.

Though Riyadh's proposed reforms will affect the lives of all of the country's citizens, they will not do so equally. Relative to the country's Shiite population, for instance, the Sunni community will benefit from more opportunities and compromises to offset the pains of reform. And once the novelty of the new measures has worn off, and Shiites find their social and economic status largely unchanged, they may come to resent their Sunni peers even more.